PAPSS crucial to revolutionize intra-Africa trade

The President of the African Export and Import Bank, Benedict Oramah, recently spoke with CNBC Africa about the significance of the Pan-African Payment and Settlement System (PAPSS) in addressing the challenges of intra-African trade and development. Oramah highlighted the pivotal role that PAPSS plays in streamlining trade transactions and eliminating unnecessary costs associated with cross-border payments. This year holds special importance for AfreximBank as it celebrates its 30th anniversary and formally launches the AfreximBank Group. The institution has expanded its reach and offerings over the years, becoming a key player in facilitating trade and project finance across Africa. Oramah emphasized the need for a unified payment system to boost trade, investment, and economic development throughout the continent. During the interview, Oramah underscored the importance of PAPSS in promoting trade and capital movement across Africa. With approximately 42 currencies in circulation on the continent, the fragmented payment system has long been a hindrance to intra-African trade. Oramah pointed out that the current system incurs unnecessary costs and delays, making it challenging for businesses to conduct transactions smoothly. By establishing a unified payment system like PAPSS, African countries can use their local currencies for cross-border trade, simplifying transactions and reducing dependence on scarce foreign currencies. Furthermore, Oramah highlighted the significant impact of PAPSS on infrastructure development and sovereign debt management in Africa. By enabling African contractors to receive payments in local currencies, projects such as the construction of dams or roads can be funded without the need for foreign currency borrowing. This shift has the potential to revolutionize the way infrastructure projects are financed on the continent, empowering African businesses and reducing the reliance on external funding sources. In addition to trade facilitation, Oramah emphasized the positive implications of PAPSS for the aviation industry in Africa. With airlines often facing challenges related to revenue stuck in different countries due to foreign exchange issues, a unified payment system like PAPSS could help streamline financial transactions and boost operational efficiency. By eliminating the barriers posed by currency exchange, African airlines can expand their routes and improve connectivity across the continent, contributing to economic growth and regional integration. Overall, Oramah reiterated the critical role of PAPSS in advancing the goals of the African Continental Free Trade Area (AfCFTA) and promoting intra-African trade. He called on more countries to join the initiative and work towards fostering a seamless payment ecosystem that supports economic development and integration across Africa. As AfreximBank continues to expand its services and partnerships, the institution remains committed to driving progress and prosperity on the continent.